Offering strategy of a price-maker energy storage system in day-ahead and balancing markets

Niklas Peter René Erich Vespermann, Stefanos Delikaraoglou, Pierre Pinson

    Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

    Abstract

    Energy storage systems (ESS) are considered as a promising solution to improve power system flexibility and facilitate the integration of renewables in electricity markets. This paper investigates the impact of strategic offering by an ESS operator in the day-ahead and balancing market. The offering strategy of a price-maker ESS operator is formulated as a bilevel model, where the upper-level problem represents the profit maximization of the ESS operator and the lower-level problem simulates the market-clearing outcome. This methodological framework can be used either to assess market efficiency distortion or as a trading strategy from the perspective of the ESS operator. Our analysis shows that adopting strategic behavior may improve ESS expected profit but reduces social welfare, especially for high ESS energy-to-power ratios.
    Original languageEnglish
    Title of host publicationProceedings of 2017 IEEE Manchester PowerTech
    Number of pages6
    PublisherIEEE
    Publication date2017
    Pages6 pp.
    ISBN (Print)9781509042371
    DOIs
    Publication statusPublished - 2017
    Event12th IEEE Power and Energy Society PowerTech Conference: Towards and Beyond Sustainable Energy Systems - University Place, University of Manchester., Manchester, United Kingdom
    Duration: 18 Jun 201722 Jun 2017

    Conference

    Conference12th IEEE Power and Energy Society PowerTech Conference
    LocationUniversity Place, University of Manchester.
    Country/TerritoryUnited Kingdom
    CityManchester
    Period18/06/201722/06/2017

    Keywords

    • Power system management, operation and economics
    • Optimisation techniques
    • energy storage
    • optimisation
    • power markets
    • pricing
    • State of charge
    • Wind forecasting
    • Energy storage
    • Electricity supply industry

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